E-Mail From Europe: 'We Will Match US on Net'

The rolling hills of southern Belgium are littered with abandoned coal mines and steel plants. Here the Industrial Revolution made its way into continental Europe in the 19th century.

But just outside of the city of Namur stands a modern Siemens-Nixdorf research lab. The German-based computer company has long produced software only for old-style mainframe computers, but recently began concentrating on PCs and the Internet. More than a dozen researchers and technicians are working on online projects, up from none a year ago.

"Europeans are finally getting on the Internet train," says project manager Emmanuel de Cocqueau. "This new technology is no longer seen as a threat but an opportunity."

Europe's Nordic fringes have long been adept on the Net, displaying higher Internet use than even in the United States. But now, after years of hesitation and outright opposition, the industrial heartland of Europe finally is rumbling toward the Information Superhighway.

In Belgium, only two service providers were listed five years ago. Now Mr. de Cocqueau says more than 100 exist. Three years ago, fewer than 50,000 European "host sites" were up and running. Today there are about 500,000, and industry analysts predict the number will double in the next five years. Many sites, they say, will appear not in English, but in French, German, and other European languages.

Playing catch-up to US

"European Internet usage [per capita] should reach American levels within a couple of years," says Ken Fraser, an analyst at Dataquest, a British computer research firm. "And because Europeans are playing catch-up, progress can go faster," he says.

This Internet boom is attracting American interest. Experienced US online merchants such as Dell Computer, Music Boulevard, and online bookseller Amazon.com are setting up European Web sites. In Britain, this has caused alarm among traditional bookstores afraid of a price war. Some, such as Waterstone's and Dillons, have responded by setting up their own Web sales sites.

London market research firm DataMonitor estimates that by 2001 nearly 7 percent of European households will make cyberpurchases totaling $3.5 billion. That's up from less than 1 percent and $96 million last year. But transatlantic tensions are mounting over how to regulate the online environment. (See story below.)

Some caution, meanwhile, is in order: Europe's Internet market at present remains much smaller than its American counterpart. In France, for example, only 1 percent of households have Internet access, compared with about 15 percent in the US. Even in Britain and Germany, the figure is no more than 3 percent.

"When it comes to the Internet, we're still three years behind the US," says Bertrand Pecquerie, CEO of World Media, a French Internet publisher. "We're still at the point where it's an intriguing experiment."

Still, change is coming fast. France, for example, initially regarded the Net as "an imperialistic American invention." The predominance of English and American control of the main Internet directory ".com" particularly galled Paris, and European Union telecommunications officials have criticized US proposals to reform the way Internet addresses are organized and regulated.

But during a speech late last year, French Prime Minister Lionel Jospin put a priority on getting his country hooked up to the Internet. "Failure to do so could rapidly have serious consequences on competitiveness and jobs," he said.

Clearing away barriers

As barriers are lifted from on top, changes from the bottom are clearing the way for increased Internet access. While local telephone calls are relatively cheap in the US, they have long cost a fortune in Europe, where telephone monopolies have not offered high-speed data transmission facilities. Telecom deregulation is ending these problems. In Finland, for example, most analysts cite the country's early telephone deregulation with spurring phenomenal Net use. Now, even long-stubborn giants such as Deutsche Telekom and France Telecom have begun to lower prices. And many nimble newcomers, such as WorldCom in the US, have started offering Europeans low-cost "all-in-one" voice data systems.

In some ways, Europe may even jump out in front of the US. Although Europeans own far fewer personal computers than Americans, they own many more digital TVs and digital cell phones than their US counterparts. So when the Internet finally comes to Europe in a big way, many analysts believe it will be via a Web TV or Web phone. "You have to look at new types of Internet distribution here in Europe," says Dataquest Internet analyst Fraser.

France's Compagnie Generale des Eaux already has developed cheap, high-speed Internet access over digital television satellite and cable television connections. "This TV system runs the Internet 50 times faster than an ordinary telephone line," says Stephane Treppoz, the company's director for interactive media.

Creating local content in local languages will accelerate Internet use. Mr. Treppoz says he has found Net users tuned in most to local news and weather reports.

When Mr. Pecquerie's World Media set up shop two years ago to produce Web sites, all his work was in English. Then this year, he got his first contract in French, for a Web magazine covering the upcoming 1998 Soccer World Cup. And he has starting selling sites to clients in Japan and elsewhere. Although the US remains a dominant force, Pecquerie says, "The Web no longer is just an American invention."

Back in Belgium, de Cocqueau connects to the Web to show off his latest project: a virtual store, picturing shelves full of goods.

"We'll soon be up and running - just like in America," he vows.